Office space provider IWG said its profit was likely to fall short for the full year 2018, after rapid expansion threatened to affect annual figures.
The group said its UK business was performing below expectations, and that expansion plans had increased costs throughout the period. The push to accelerate its growth is now expected to lead to short-term opening losses, and increased costs.
“Group operating profit for 2018 is now expected to be below management’s previous expectations by approximately £15 million to £20 million”, IWG warned.
“We now expect to add approximately 6.7m sq. ft. of new space, which represents an annual organic increase of approximately 45 percent and is over 17 percent higher than our previous guidance”.
The company said it anticipated adding 275 new locations to its network with an associated net growth investment of approximately £230 million, higher than previously expected.
The weaker-than-expected forecasts may have an impact on potential bids for the group. IWG has been at the centre of several takeover bids, the most recent from private equity firm Terra Firma.
